18 Apr 2013
Hello and welcome to the EPP Group's round-up of the week's plenary session here in Strasbourg.
On Tuesday the most comprehensive and far-reaching banking regulation in the history of the EU was adopted, and it's not just about bankers bonuses.
Following a year of negotiations with EU Member States, Parliament approved the fourth Capital Requirements Directive, which will create a safer financial system. The Directive ensures that banks build solid security buffers and put aside not only more but better capital to cover their business risks so that taxpayers' money no longer has to be used to prop up the banks. SMEs' will have better access to finance, provision for loans will be raised and the risk ratio dropped by 30 percent.
We are stabilising Europe's banks, we are financing the real economy, we are improving access to finance for Small and Medium sized Enterprises, we are increasing the role of "fairplay" in the banking sector and taking the burden off the taxpayer in times of crisis.
Othmar Karas introduced two important elements in particular.
Bonuses will be capped to 100% of a banker's annual salary and country-by-country reporting will be required for the first time. This means European banks will have to publish details of their profit and tax, as well as the subsidies they receive from every single country.
The new rules will come into effect on 1 January 2014.
Also on Tuesday, Parliament voted against the Commission's proposal to temporarily withdraw carbon emission certificates.
Since the economic crisis there has been an increase of supply of emission allowances but reduced demand and consequently a fall in market prices. To address this imbalance the Commission proposed a system of backloading or withdrawal of 900 million allowances from the market, but Eija-Riitta Korhola, the Group's spokesperson on the issue, said that the present situation is merely the result of a functioning market mechanism since the recession. Removing a large number of emission certificates would lead to higher energy prices and hinder growth and job creation.
The markets go up and down, it's normal. The emission market was not working badly when the prices went down, it's a normal consequence of a recession. But it's not logical for the Commission to try to change the market mechanism artificially. It is irresponsible during a recession, we shouldn't destroy the basis for growth.
Rejection of the proposal does not affect the EU's emission reduction targets. It is still on track to achieve a 20% reduction in greenhouse gas emissions by 2020.
On Wednesday members held a debate on the handling of the Cyprus bailout. EPP Group Spokesperson on Economic and Monetary Affairs, Jean-Paul Gauzès, said there were a few lessons to be learnt.
He blamed Cypriot banks for building up too much risk but the EU institutions for their lack of vigilance and the Eurogroup for its disastrous communication on the first bail-out plan.
EU intervention should be transparent but also demonstrate a will to explain its decisions to all citizens in a way they understand. On the contrary, the collective behaviour of the Finance Ministers caused a catastrophic fiasco.
EU citizens saw the first plan as daylight robbery that could affect them all.
For the EPP Group it is now of paramount importance that we implement the banking union and a single supervisory mechanism as soon as possible to avoid similar crises. The Group understands that the agreed economic and financial adjustment programme is painful for the Cypriot people but expressed its full support to the government to help Cyprus back onto the road to sustainable growth.
And that's all for this plenary news but please join us again next week in Brussels where we will be bringing you more information about the activities of the largest Group in the Parliament. Thank you for watching!
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